Retired hedge-fund manager David Rocker asks Barron’s readers to consider some important questions about the Securities and Exchange Commission.

A lot of people would like to know why so few of those who brought this economy to the brink of collapse have paid any price for their actions. They also ask why banks, deemed too big to fail at the time of crisis, have become still larger.

Though we still have no good answers, we now have even more questions:

Are market regulators organized to anticipate problems and forestall dangerous practices? Or are they simply reactive and largely ineffective prosecutors? Do they have the tools or the motivation to address potentially destabilizing market behavior in the future?

The record isn’t encouraging. The Securities and Exchange Commission was warned in detail about Enron, Bernie Madoff, and Allen Stanford, among a host of others, but did little to prevent staggering losses to investors. Their silence in the face of some recent events is very disturbing. …

… Regulators seem to have abdicated their responsibilities. They draw their funding from Congress, where lobbyists for special interests have never been more abundant and effective, so regulators undoubtedly face considerable scrutiny and pressure. But it’s their job to follow the law, not the lawmakers. The regulators would be more effective if they were truly independent from the political process.

The SEC acts as if it has too many lawyers and too few experienced analysts and accountants. They react, rather than anticipate, and key officials seem reluctant to antagonize the lobbyists and law firms that hire them at huge salaries after they leave the agency.